Eurozone crisis: Economics 2 Democracy O

11th November 2011

Buttonwood on the Economist is certainly worried. He writes: "The solutions to the European debt crisis seem to sidestep democratic government. The Greeks have appointed a former banker, Lucas Papademos, as prime minister and the Italians seem to be heading for Mario Monti, an academic and former EU commissioner. The idea, presumably, is that these candidates – who stand above the political fray – will be able to take the unpopular decisions that other politicians shrink from.But using the term "unpopular" for policies implies that most voters don't agree with them. Perhaps this is an inevitable problem with democracy."

Reuters reports the views of Cardiff professor of finance Laurence Copland (though he was writing before the Greeks had dropped their referendum plans), and he is pessimistic about developments even before the two Prime Ministers exited stage left and stage right. He sees the EU structures at fault.

He writes: "The general lesson for Brussels is the same as it always has been. Leadership in a democracy means winning over the public to the course of action you believe is best, and only then, if you succeed, going ahead. The current mess results from riding roughshod over the European electorate and counting on them to see the supposed benefits ex-post. In reality, they were never very keen even during the good times, so it is hardly surprising they are now in open revolt. I have no idea how it will all end, but it is not just the economic stress across Europe which is worrying. It is capitalism – and, with it, democracy – which is under threat."

But it is not just the EU's democracy that is being debated. On this www.youtube.com video, economist Dambisa Moyo answers a question about whether it would make sense for the US to move to a Singaporean model. While largely rejecting that scenario, she does suggest the US may suffer from hyper-democracy and wonders if, for example, term limits could be extended as with Mexico and Brazil.

On the BBC's Today Programme a few days ago Tory MP and financier John Redwood, argued that democracy is under threat from the structure of the Eurozone and EU but former Tory MEP John Stevens, who was in favour of the euro, says the problem is that nations are facing the overly powerful internationalised markets.

And the the Guardian has, of course, joined the debate. Economics editor Larry Elliott is worried about who the decision makers are. "The real decisions in Europe are now taken by the Frankfurt Group, an unelected cabal made of up eight people: Lagarde; Merkel; Sarkozy; Mario Draghi, the new president of the ECB; José Manuel Barroso, the president of the European Commission; Jean-Claude Juncker, chairman of the Eurogroup; Herman van Rompuy, the president of the European Council; and Olli Rehn, Europe's economic and monetary affairs commissioner. This group, which is accountable to no one, calls the shots in Europe."

For now it looks like it is ‘Economics 2 Democracy 0' but has anyone asked the voters or is that the point?